An unprecedented public inquiry into the conduct of British soldiers in Iraq is expected to contain damning criticism of senior army officers and their legal advisers, and highlight the failure of commanders to ensure orders were passed down.

The inquiry's report into the September 2003 death of Baha Mousa, a Basra hotel worker, is also understood to include scathing criticism of military intelligence personnel and the lack of training and preparation British troops received for the invasion of Iraq and its aftermath.

The report by retired appeal court judge Sir William Gage, due to be published next week, is unlikely to accuse the army of systematic torture, army sources reportedly said in what appeared to be a damage-limitation exercise.

The Sunday Telegraph quoted a senior, unidentified army officer as saying: "The inquiry has found no evidence of systematic abuse because there wasn't any. That is not to say that abuse did not happen, but claims that there was a culture or a conspiracy to torture alleged insurgents has not been proved."

Such findings were never likely, given the evidence heard by Gage. Lawyers acting for Iraqi families, however, have since collected fresh material which they claim does point to the systematic abuse by British troops.

They are demanding another public inquiry into wider allegations surrounding the abuse of more than 200 Iraqi detainees by the Joint Forces Interrogations Team (JFIT) near Basra.

Gage is expected to point to a catalogue of failings that led to the death of 26-year-old Mousa, who was arrested with nine other Iraqis at the Haitham hotel in Basra by soldiers of the 1st Battalion The Queen's Lancashire Regiment (QLR).

Rifles, bayonets and suspected bomb-making equipment were found at the scene but there was no evidence that they had been used against British troops.

Mousa died after 36 hours in detention. A postmortem found he had suffered asphyxiation and at least 93 injuries to his body, including fractured ribs and a broken nose. Sir Michael Jackson, Britain's top general at the time, described the episode as "a stain on the character of the British army".

At the end of a six-month court martial six members of the QLR, including the regiment's commanding officer, Colonel Jorge Mendonca, were cleared of abuse and negligence. A seventh, Corporal Donald Payne, who pleaded guilty, was jailed for a year and dismissed from the army. The court martial judge accused the soldiers of closing ranks, a charge Gage is expected to echo.

Des Browne, then defence secretary, set up a public inquiry in 2008, when the MoD admitted soldiers had breached the terms of the Human Rights Act. The inquiry heard evidence from nearly 250 witnesses, and was told that British troops used interrogation techniques – hooding; deprivation of sleep, food, and drink; subjection to noise; and wall-standing – outlawed by the UK government in March 1972 after an investigation into interrogation in Northern Ireland.

The Gage inquiry heard that senior officers were unaware of the 1972 ban and were confused or ignorant of their obligations under domestic and international law.

The detainees' closing submissions noted: "From the chain of command to the medical staff and even to the padre, no one was prepared to speak up for what was right and report what was wrong."

Gage heard evidence that military and civilian officials tried to downplay the significance of Mousa's death and dissembled when MPs asked about the circumstances surrounding it.

He also heard how the MoD's top legal advisers failed to seek the advice of Lord Goldsmith, the attorney general who was known to take the view that British troops in Iraq were bound by the UK's Human Rights Act.

The MoD said it would look carefully at Gage's report. It said more than 100,000 service personnel served in Iraq and the vast majority conducted themselves with "extraordinary courage, professionalism and decency in very demanding circumstances".